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Borrowing short term from SEP IRA

Investor from Roseburg, Oregon

I found a SFH that is foreclosed and needs some work. I am interested in purchasing it and keeping it as a rental after I do the needed repairs and fixes.

Here is my issue...

In the last two years I have bid on several separate properties in my area and I have lost all of them. It seems to be all cash buyers with quick closes. The last property I was told that the bank even took a lower bid than mine that was all cash.

With that in mind...

I have the funds to buy the house outright with my SEP IRA. Is it possible to borrow the funds from my IRA (I believe I have 120 days) and then replace them in some other fashion? Such as, home equity loan from another property or refinancing the purchased property into a 15-30 year traditional loan?

Investor from Roseburg, Oregon

Investor from Roseburg, Oregon

replied over 2 years ago

I suppose I worded my title wrong. My apologies. I not looking to borrow from the IRA, I am simply going to roll it over utilizing my 60 day grace period... during which I would like to generate a similar amount of money through a refinance of the purchased property or equity loan from an existing property I already own.

Professional from Carlsbad, California

Yes the 60-day rollover rule applies to all IRAs including SEP IRAs. However, you can only do one 60-day rollover per 12 months, and this rule applies to all IRAs in aggregate. For example, if you have another IRA, you will not be able to also do a 60-dary rollover from it until the 12-month period has been satisfied under the SEP IRA.

Investor from Roseburg, Oregon

replied over 2 years ago

Thank you Mark and Dmitriy.

I guess my question is if I utilize this 60-day rollover to purchase the property, is it possible to recover those fund through more traditional means within 30-45 days? Are there investors out there that do this and what is your experience?

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